Category Archives: Taxation

Remote Sellers Must Register in Texas before October 1, 2019

By Coleman Jackson, Attorney, Certified Public Accountant
September 16, 2019

 

Remote Sellers Must Register in Texas before October 1, 2019

Texas imposes a 6.25 percent state sales tax and use tax on all retail sales, leases and rentals of most goods and some services that are either sold in Texas or used in Texas.  Cities, Counties and Transit Authorities can charge up to 2% sales tax on taxable goods and services.  This local sales tax varies from city to city, county to county and transit authority to transit authority throughout the state of Texas.   The maximum sales and use tax in Texas is 8.25 percent.

 

online retail sales

Remote sellers are required to begin sales and use tax collection on October 1, 2019 on their Texas sales.    The remote seller must collect the correct tax by using the Sales Tax Rate Locator.  For example if a remote seller sales a chest of imported cigars to a person residing in Dallas, Texas; they must collect 8.25 percent tax on the gross sale at the time of the sale.  If this same sale is made in another city of Texas the total collected tax could be lower.  It would not be higher because 8.25% is the maximum sales and use tax in Texas.  However, other types of tax obligations could be implicated in this hypothetical, such as, tobacco taxes and fees. Remote sellers doing business in Texas must register with the Texas Comptroller of Public Accounts before October 1, 2019 to fulfill their Texas tax responsibilities.  First, remote sellers must apply for a Sales Tax Permit pursuant to the Texas Tax Code.

 

remote seller

Once the remote seller is properly registered with the Texas Comptroller of Public Account and receive their sales tax permit, they will be advised by the Texas Comptroller as to whether they must report their taxable sales and use taxes on a monthly basis, quarterly basis or annual basis.  Monthly sales and use tax reports are due on the 20th day of each month following the reporting month.  Quarterly filers must file their sales and use tax reports on April 20th, July 20th October 20th and January 20th.  Annual filers must report taxable Texas sales and use taxes on January 20th for the previous year.

Out of State sellers or remote sellers are required to begin collecting sales and use tax from their Texas customers on October 1, 2019.  If the remote seller fails to register and report Texas Sales and Use Tax they will be subjected to the penalties, administrative actions, and judicial options available under the Texas Tax Code in enforcing the tax laws.  The TTC provides for civil and criminal sanctions against businesses doing business in Texas and not in compliance with their tax responsibilities.

 

Businesses out of Texas

Businesses, who run afoul of the Texas Tax Code and desire to comply with Texas tax laws, whether they are in Texas or someplace else in the world, could possibly qualify to voluntarily disclose under the Texas Voluntary Disclosure Agreement Process (VDA).  A company representative must initiate the process on behalf of an anonymous client who meets the threshold requirements by contacting the Business Activity Research Team (BART) in writing.  If the business has already been contacted by the Texas Comptroller regarding non-compliance with Texas Tax laws, the business cannot voluntarily disclose.  It should be noted that the VDA process is available for all types of taxes administered by the Texas Comptroller of Public Accounts.  Some of the types of taxes that the Texas Comptroller is responsible for administering under the Texas Tax Code are as follows:

  • Sales and Use Tax
  • Hotel Tax
  • Franchise Tax
  • Tobacco Taxes and Fees
  • Battery Sales Fees
  • Cement Production
  • Boat and Boat Motor Taxes
  • Insurance Taxes
  • Manufactured Housing
  • Controlled Substances

 

This law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader.  You should consult with legal counsel in your geographical area with respect to any legal issues impacting you, your family or business.

Coleman Jackson, P.C. | Taxation, Litigation, Immigration Law Firm | English (214) 599-0431 | Spanish (214) 599-0432

The Earned Income Tax Credit Two Year Band

By Coleman Jackson, Attorney, Certified Public Accountant
September 10, 2019

 

The Earned Income Tax Credit

The Earned Income Tax Credit or EITC is designed to assist working class families with children by putting money in their pockets.  The EITC is a tax credit, not, a tax deduction.  The difference is huge!   A tax credit is a dollar for dollar reduction in the taxes owed.  Tax credits generally will result in refunds and money in the taxpayers’ pockets. EITC often results in refunds to the taxpayer; although the IRS cannot issue refund checks for the Earned Income Tax Credit before mid-February.

 

The Earned Income Tax Credit

 

The rules for qualifying and claiming the Earned Income Tax Credit are complicated.  An excerpt from IRS Publication 596 reads as follows:

 

Table 1. Earned Income Credit in a Nutshell:  First, you must meet all the rules in this column.
Chapter 1. Rules for Everyone
1. Your adjusted gross income (AGI) must be less than: • $49,194 ($54,884 for married filing jointly) if you have three or more qualifying children, • $45,802 ($51,492 for married filing jointly) if you have two qualifying children, • $40,320 ($46,010 for married filing jointly) if you have one qualifying child, or • $15,270 ($20,950 for married filing jointly) if you don’t have a qualifying child. 2. You must have a valid social security number by the due date of your 2018 return (including extensions).

3.Your filing status can’t be married filing separately.

4. You must be a U.S. citizen or resident alien all year.

5. You can’t file Form 2555 or Form 2555-EZ (relating to foreign earned income).

6. Your investment income must be $3,500 or less. 7.You must have earned income.

Second, you must meet all the rules in one of these columns, whichever applies.
Chapter 2. Rules If You Have a Qualifying Child Chapter 3. Rules If You Do Not Have a Qualifying Child
8. Your child must meet the relationship, age, residency, and joint return tests.

9. Your qualifying child can’t be used by more than one person to claim the EIC.

10. You can’t be a qualifying child of another person.

11. You must be at least age 25 but under age 65.

12. You can’t be the dependent of another person.

13. You can’t be a qualifying child of another person.

14. You must have lived in the United States more than half of the year.

Third, you must meet the rule in this column.
Chapter 4.Figuring and Claiming the EIC
15. Your earned income must be less than: • $49,194 ($54,884 for married filing jointly) if you have three or more qualifying children, • $45,802 ($51,492 for married filing jointly) if you have two qualifying children, • $40,320 ($46,010 for married filing jointly) if you have one qualifying child, or • $15,270 ($20,950 for married filing jointly) if you don’t have a qualifying child.

 

If a taxpayer claims the Earned Income Tax Credit, the IRS may send a letter to them asking that they send the IRS information to verify the EITC claim.  An appropriate and timely response to the request for substantiation of the EITC is very important because failure to do so could prohibit the taxpayer from claiming the Earned Income Tax Credit (EITC) for subsequent tax periods.  The EITC substantiation may be in the form of the child’s birth certificate, health records, school records and other evidence in substantiation that the taxpayers’ meet all of the qualifications listed above to claim the EITC.  In the event the taxpayers improperly claim the EITC, the taxpayer is banded for two years from claiming the credit.  Internal Revenue Code Section 32(k)(1) permits the IRS to enforce the rules regulating the Earned Income Tax Credit by banding violators from claiming the EITC up to two years.  Recently the IRS Office of Chief Counsel issued an advisement that essentially states that where a taxpayer improperly claim (or fail to substantiate) their EITC claim for one child and continues to claim the EITC in subsequent years for that child, the taxpayers are prohibited from claiming the EITC for that child and all other children even though they may qualify for the EITC in subsequent years.  Claiming the child tax credit when under the two year band for any child has grave consequences.

 

Taxpayers can use the EITC Assistant on the IRS website to see if they qualify for the EITC.  Again claiming the EITC improperly has grave financial consequences.  Working people with low to moderate incomes must follow all the EITC rules so that they don’t run afoul of them and be stopped from claiming the Earned Income Tax Credit even when they otherwise qualify for this working family tax benefit.

 

This law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader.  You should consult with legal counsel in your geographical area with respect to any legal issues impacting you, your family or business.

Coleman Jackson, P.C. | Taxation, Litigation, Immigration Law Firm | English (214) 599-0431 | Spanish (214) 599-0432

Los contribuyentes con deudas tributarias significativas pueden perder sus pasaportes estadounidenses

Por Coleman Jackson, abogado, contador público certificado
30 agosto 2019

Los contribuyentes con deudas tributarias significativas pueden perder sus pasaportes estadounidenses

 

 ¿Has oído hablar de la Ley de 2015 de Fijación del Transporte de Superficie de Estados Unidos (FAST, por sus siglas en inglés)? Bueno, bajo FAST, el IRS tiene la autoridad de notificar al Departamento de Estado de los contribuyentes certificados como adeudados al gobierno federal. Una deuda tributaria significativa se define actualmente como una factura tributaria morosa de $ 52,000 o más. El FAST requiere que el Departamento de Estado revoque el pasaporte estadounidense del contribuyente moroso y limite la capacidad del contribuyente para viajar fuera de los Estados Unidos.

 

Los contribuyentes que tengan la intención de viajar fuera de los Estados Unidos deben negociar con el IRS para levantar la certificación de impuestos morosos.

 

Los contribuyentes que tengan la intención de viajar fuera de los Estados Unidos deben negociar con el IRS para levantar la certificación de impuestos morosos. Hasta que eso suceda, el contribuyente podría quedar varado fuera de los EE. UU. con un pasaporte revocado, o ser bloqueado al recibir un pasaporte por primera vez o al renovarlo, dejándolo incapaz de viajar fuera del país por cualquier motivo.

 

El IRS ha identificado varias formas en que los contribuyentes pueden evitar que el IRS notifique al Departamento de Estado de su deuda tributaria gravemente morosa de la siguiente manera

 

El IRS ha identificado varias formas en que los contribuyentes pueden evitar que el IRS notifique al Departamento de Estado de su deuda tributaria gravemente morosa de la siguiente manera:

  1. Pagar la deuda tributaria en su totalidad;
  2. Pagar la deuda tributaria oportunamente bajo un acuerdo de pago aprobado;
  3. Pagar la deuda tributaria oportunamente bajo un aceptado ofrecimiento de transacción;
  4. Pagar la deuda tributaria a tiempo según los términos de un acuerdo de conciliación con el Departamento de Justicia;
  5. Tener una apelación de debido proceso de cobro pendiente con un gravamen; o
  6. Que se suspenda el cobro porque un contribuyente hizo una elección de cónyuge inocente o ha solicitado alivio de cónyuge inocente.

El consejo práctico: los contribuyentes que tienen que viajar al extranjero deben cumplir con sus obligaciones tributarias federales mucho antes de que tengan que viajar; porque aparte de la opción uno, arriba (pagar la deuda tributaria en su totalidad), las opciones sugeridas tardan meses y algunas incluso tardan años en resolverse en las negociaciones con el IRS.

Los siguientes tipos de contribuyentes han quedado exentos de los requisitos de certificación de contribuyentes morosos bajo FAST:

  • Contribuyentes en procedimiento de bancarrota;
  • Víctimas de robo de identidad;
  • Los contribuyentes que el IRS ha considerado no cobrables;
  • Los contribuyentes ubicados dentro de un área de desastre declarada por el gobierno federal;
  • Contribuyentes con solicitud de acuerdo de pago pendiente;
  • Contribuyentes con un ofrecimiento de transacción pendiente con el IRS; o
  • Los contribuyentes con un ajuste aceptado por el IRS que satisfará la deuda en su totalidad; y
  • Los contribuyentes que sirven en una zona de combate no están exentos de las reglas de certificación, pero la certificación se pospone mientras realizan su turno de servicio en la zona de combate.

 

Los contribuyentes con planes de viajar al extranjero simplemente deben ser conscientes del hecho de que sus planes pueden ser totalmente revertidos si le deben al gobierno federal $52,000 o más en impuestos atrasados.

 

Los contribuyentes con planes de viajar al extranjero simplemente deben ser conscientes del hecho de que sus planes pueden ser totalmente revertidos si le deben al gobierno federal $52,000 o más en impuestos atrasados. Los $ 52,000 podrían ser adeudados en impuestos sobre ingresos personales o impuestos comerciales donde el contribuyente individual haya sido considerado como una parte responsable, como en los impuestos sobre la nómina con respecto a la multa del fondo fiduciario que generalmente se aplica al contribuyente moroso que debe al negocio o incluso empleados del negocio responsables de decidir qué vendedores y proveedores se les paga y cuándo. También se puede alcanzar el umbral de certificación de $52,000 para un período impositivo único o varios períodos impositivos combinados. Ejemplo no 1, el contribuyente debe al IRS $2,000 para 2009, $14, 000 para 2015 y $40,000 para 2018. En este ejemplo, el contribuyente es gravemente delincuente y el IRS bajo FAST puede certificarlo como gravemente delincuente ante el Departamento de Estado de EE.UU. Ejemplo No. 2, el contribuyente posee una empresa de fabricación de molinos de viento con veinte empleados; su negocio se desaceleró a un susurro en el tercer trimestre de 2019 y el propietario del negocio decidió pagar el alquiler de oficinas, servicios públicos, empleados y proveedores y no los impuestos de nómina del IRS. El IRS se entera de esta decisión y encuentra al propietario como la parte responsable bajo la sección tributaria pertinente y accede a una multa de $52,000 en fondos fiduciarios para el propietario. En este caso, el IRS podría certificar al propietario /contribuyente como un contribuyente gravemente moroso bajo FAST. El pasaporte del propietario podría ser revocado o el Departamento de Estado de EE. UU. podría denegar la renovación de su pasaporte.

 

Este blog de derecho está escrito por  La Firma de Abogados de Impuestos | Litigación  | Inmigración de Coleman Jackson, P.C. con fines educativos; Esto no crea relación de abogado-cliente entre esta firma de abogados y el lector. Usted debe consultar con un asesor legal en su área geográfica con respecto a todas las cuestiones legales que lo afectan a usted, su familia o negocio.

Coleman Jackson, P.C. | Firma de Abogados de Impuestos, Litigación e Inmigración |Ingles (214) 599-0431 | Español (214) 599-0432

Taxpayers with Significant Tax Debts Can Lose Their U.S. Passports

By Coleman Jackson, Attorney, Certified Public Accountant
August 21, 2019

 

Taxpayers with Significant Tax Debts Can Lose Their U.S. Passports

 

Ever heard of the Fixing America’s Surface Transportation (FAST) Act of 2015?  Well, under FAST the IRS has the authority to notify the State Department of taxpayers certified as owing the federal government.  A significant tax debt is currently defined as a delinquent tax bill of $52,000 or moreThe FAST requires the State Department to revoke the delinquent taxpayer’s U.S. passport and limit the taxpayer’s ability to travel outside the United States.

 

Taxpayer’s who intend to travel outside the United States must negotiate with the IRS to get the delinquent tax certification lifted

 

Taxpayer’s who intend to travel outside the United States must negotiate with the IRS to get the delinquent tax certification lifted.  Until that happens the taxpayer could become stranded outside of the U.S. with a revoked passport, or be blocked receiving a passport for the first time or on renewal leaving them unable to travel out of the country for any reason.

 

taxpayers who have to travel abroad must responsibility deal with their federal tax obligations long before they need to travel; because other than option one, above (paying the tax debt in full), the suggested options take months and some of them even take years to resolve in negotiations with the IRS

 

The IRS has identified several ways taxpayers can avoid having the IRS notify the State Department of their seriously delinquent tax debt as follows:

  1. Paying the tax debt in full;
  2. Paying the tax debt timely under an approved installment agreement;
  3. Paying the tax debt timely under an accepted offer in compromise;
  4. Paying the tax debt timely under the terms of a settlement agreement with the Department of Justice;
  5. Having a pending collection due process appeal with a levy; or
  6. Having collection suspended because a taxpayer has made an innocent spouse election or requested innocent spouse relief.

The practical tiptaxpayers who have to travel abroad must responsibility deal with their federal tax obligations long before they need to travel;  because other than option one, above (paying the tax debt in full),  the suggested options take months and some of them even take years to resolve in negotiations with the IRS.

The following types of taxpayers have been exempted from the delinquent taxpayer certification requirements under FAST:

  • Taxpayers in bankruptcy proceedings;
  • Identity Theft Victims;
  • Taxpayers whom the IRS has deemed non-collectible;
  • Taxpayers located within a federal declared disaster area;
  • Taxpayers with pending Installment Agreement request;
  • Taxpayers with pending Offer in Compromise with the IRS; or
  • Taxpayers with an IRS accepted adjustment that will satisfy the debt in full; and
  • Taxpayer’s serving in a combat zone is not exempt from the certification rules, but the certification is postponed while they do their tour of duty in the combat zone.

 

Taxpayers with plans to travel abroad simply need to be aware of the fact that their plans can be totally upended if they owe the federal government more$52,000 or more in back taxes.

 

Taxpayers with plans to travel abroad simply need to be aware of the fact that their plans can be totally upended if they owe the federal government $52,000 or more in back taxes.  The $52,000 could be owed on personal income taxes or business taxes where the individual taxpayer has been found be to be a responsible party, such as in payroll taxes with respect to the trust fund penalty that usually applies to delinquent taxpayer who owns the business or even employees of the business responsible for deciding what vendors and suppliers get paid and when.  Also the $52,000 certification threshold can be reached for a single tax period or multiple tax periods combined.  Example No 1, the taxpayer owes the IRS $2,000 for 2009, $14, 000 for 2015, and $40,000 for 2018.  In this example the taxpayer is seriously delinquent and the IRS under FAST can certify them as seriously delinquent to the U.S. State Department.  Example No. 2, the taxpayer owns a windmill manufacturing company with twenty employees; their business slowed to a whisper in the third quarter 2019 and the business owner decided to pay office rent, utilities, employees and suppliers and not the IRS payroll taxes.  The IRS learns of this decision and finds the owner the responsible party under the germane tax section and access a $52,000 trust fund penalty on the owner.  In this case, the owner/taxpayer could be certified by the IRS as a seriously delinquent taxpayer under FAST.  The owner’s passport could be revoked or their passport renewal could be denied by the U.S. State Department.

 

This law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader.  You should consult with legal counsel in your geographical area with respect to any legal issues impacting you, your family or business.

Coleman Jackson, P.C. | Taxation, Litigation, Immigration Law Firm | English (214) 599-0431 | Spanish (214) 599-0432

FBAR

Por: Coleman Jackson, abogado, contador público certificado
03 agosto 2019

FBAR

La Ley de Información de Divisas y Transacciones en el Extranjero de 1970, también conocida como la Ley de Secreto Bancario, requiere que los residentes, ciudadanos y empresas con cuentas bancarias en el extranjero y algunos otros activos en el extranjero de EE. UU., reporten esos intereses a la Red de Delitos Financieros anualmente en el Formulario 114 antes del 15 de abril del año siguiente.  El Formulario 114 es el Informe de Banco Extranjero y Cuentas Financieras o (FBAR). La Ley de Secreto Bancario tiene una serie de requisitos de información que se aplican a las instituciones financieras, así como a aquellas personas con intereses en activos extranjeros. Los requisitos de mantenimiento de registros e informes que se aplican a los titulares de cuentas extranjeros se detallan en 31 U.S.C. Sección. 5414. En el formulario 114, el FBAR debe presentarse electrónicamente a través del sitio web de la red de archivos electrónicos de la Ley de secreto bancario. La Red de Delitos Financieros es una agencia del Tesoro de los Estados Unidos, pero no es el Servicio de Impuestos Internos. Estas son dos agencias separadas bajo el Departamento del Tesoro de los Estados Unidos.

 

La Ley de Secreto Bancario en 31 U.S.C. Sección. 5414 también requiere que los contribuyentes con cuentas bancarias extranjeras divulguen esas cuentas en sus declaraciones de impuestos federales anuales.

 

La Ley de Secreto Bancario en 31 U.S.C. Sección. 5414 también requiere que los contribuyentes con cuentas bancarias extranjeras divulguen esas cuentas en sus declaraciones de impuestos federales anuales. El Formulario 1040 del IRS en la línea 7a del Anexo B pregunta específicamente si el contribuyente tiene un interés o una autoridad signataria sobre una cuenta bancaria extranjera. Una respuesta afirmativa a esta pregunta en el Anexo B requiere que el contribuyente identifique el país de la cuenta y algunos otros detalles. El hecho de que un contribuyente no marque la casilla “sí” cuando tiene un interés de un banco extranjero o una autoridad signataria sobre un activo extranjero aumenta seriamente su riesgo legal porque los tribunales han dicho que la falta de “marcar la casilla” constituye una violación intencional de la Ley de Secreto Bancario. La falta de lectura de la declaración se ha considerado insuficiente para evitar la responsabilidad en virtud de la Ley. Evitar el conocimiento de los requisitos de Actos no ha sido un plan exitoso. Los tribunales federales de todo el país han abordado estas diversas defensas y han encontrado que carecen de peso.

 

Cuando una violación de la Ley de Secreto Bancario no es intencional, la multa de FBAR por no revelar el interés financiero en cuentas bancarias extranjeras, valores o otros activos financieros se limita a $ 10,000.

 

Cuando una violación de la Ley de Secreto Bancario no es intencional, la multa de FBAR por no revelar el interés financiero en cuentas bancarias extranjeras, valores o otros activos financieros se limita a $ 10,000. Este límite solo se aplica a las violaciones no intencionales del estatuto FBAR. Si no se marca correctamente la casilla y no se revela a un preparador de declaraciones de impuestos la existencia de cuentas bancarias en el extranjero o otros activos en el extranjero es extremadamente probable que se considere una violación intencional de la Ley. La multa permitida por la Ley de Secreto Bancario por una violación intencional es igual al mayor de $ 100,000 o el 50% del saldo más alto en la cuenta en el momento de la violación. También hay penalidades criminales por la violación de la Ley de Secreto Bancario si un contribuyente es juzgado y condenado en virtud de la Ley. Según la ley, el Servicio de Impuestos Internos tiene 6 años desde la fecha de la violación para evaluar la multa de FBAR y pueden demandar al contribuyente o al patrimonio del contribuyente para cobrar las multas. Tenga en cuenta que las sanciones impuestas por FBAR no desaparecen con la muerte del contribuyente.

 

Nuevamente, si el IRS impone las multas de FBAR y el contribuyente se niega a pagarlas, el gobierno de los EE.UU. puede intentar cobrar las multas en un tribunal federal de conformidad con 31 EE. UU. Sección. 5321 (b) (1).

 

Nuevamente, si el IRS impone las multas de FBAR y el contribuyente se niega a pagarlas, el gobierno de los EE.UU. puede intentar cobrar las multas en un tribunal federal de conformidad con 31 EE. UU. Sección. 5321 (b) (1). El gobierno debe demostrar ante el tribunal la preponderancia de la evidencia de que (a) el contribuyente es un residente, ciudadano o entidad comercial de los EE. UU. sujeto a la Ley de Secreto Bancario, (b) el contribuyente tenía una obligación de informar conforme a la Ley de Secreto Bancario y fracasó para cumplir con la obligación de informar, y (c) la naturaleza de la violación del contribuyente en términos de violación no intencional o intencional del estatuto, y (d) el contribuyente no ha pagado oportunamente la multa impuesta. El contribuyente debe alegar y probar cualquier defecto en el estatuto de limitaciones en el caso del gobierno. Los casos FBAR, en general, son casos basados ​​en hechos. Los contribuyentes ganan algunos y pierden algunos.

Este blog de derecho está escrito por  La Firma de Abogados de Impuestos | Litigación  | Inmigración de Coleman Jackson, P.C. con fines educativos; Esto no crea relación de abogado-cliente entre esta firma de abogados y el lector. Usted debe consultar con un asesor legal en su área geográfica con respecto a todas las cuestiones legales que lo afectan a usted, su familia o negocio.

Coleman Jackson, P.C. | Firma de Abogados de Impuestos, Litigación e Inmigración |Ingles (214) 599-0431 | Español (214) 599-0432

FBAR

By:  Coleman Jackson, Attorney, Certified Public Accountant
July 16, 2019

FBAR - foreign bank accounts

 

The 1970 Currency and Foreign Transactions Reporting Act, which is otherwise known as the Bank Secrecy Act requires U.S. residents, citizens and businesses with foreign bank accounts and certain other overseas assets to report those interest to the Financial Crimes Network annually on Form 114 by April 15th of the following year. Form 114 is the Report of Foreign Bank and Financial Accounts or (FBAR). The Bank Secrecy Act has a number of reporting requirements that are placed on financial institutions as well as those placed persons with foreign asset interests.  The record keeping and reporting requirements placed on  foreign account holders  are set out in detail in 31 U.S.C. Sec. 5414Form 114, the FBAR must be filed electronically through the Bank Secrecy Act E-Filing Network website.  The Financial Crimes Network is an agency of the United States Treasury but it is not the Internal Revenue Service.  These are two separate agencies under the U.S. Department of Treasury.

 

The Bank Secrecy Act at 31 U.S.C. Sec. 5414 also requires taxpayers with foreign bank accounts to disclose those accounts on their annual federal tax returns.

 

The Bank Secrecy Act at 31 U.S.C. Sec. 5414 also requires taxpayers with foreign bank accounts to disclose those accounts on their annual federal tax returns.  IRS Form 1040 at line 7a of Schedule B specifically asks whether the taxpayer has an interest or signatory authority over a foreign bank account.  A ‘yes ‘answer to this question on Schedule B requires the taxpayer to identify the country of the account and certain other details.  A taxpayer’s failure to check the box ‘yes’ when they have foreign bank interest or signatory authority over a foreign asset seriously increases their legal jeopardy because courts have said that failure to ‘check the box’  constitutes a willful violation of the  Bank Secrecy Act.  Failure to read the return has been held to be insufficient to avoid liability under the Act.  Avoiding knowledge of the Acts requirements has not been a successful plan.   Federal courts all over the country have addressed these various defenses and found them lacking weight.

 

IRS Form 1040 at line 7a of Schedule B specifically asks whether the taxpayer has an interest or signatory authority over a foreign bank account.

 

When a violation of the Bank Secrecy Act is not willful, the FBAR penalty for failure to disclose financial interest in foreign bank accounts, securities or other financial assets is capped at $10,000.  This cap only applies to non-willful violations of the FBAR statute.  Failure to check the box correctly and failure to disclose to a tax return preparer the existence of foreign bank accounts or other assets overseas is extremely likely to be found to be a willful violation of the Act.  The penalty permitted under the Bank Secrecy Act for a willful violation is equal to the greater of $100,000 or 50% of the highest balance in the account at the time of the violation.  There are also criminal penalties for violation of the Bank Secrecy Act if a taxpayer is tried and convicted under the Act.  Under the law, the Internal Revenue Service has 6 years from the date of the violation to assess the FBAR penalty and they can sue the taxpayer or the taxpayer’s estate to the collect the penalties.  Note that assessed FBAR penalties do not go away with the death of the taxpayer.

 

If the IRS assess FBAR penalties and the taxpayer refuses to pay them, the U.S. government can seek to collect the penalties in federal court pursuant to 31 U.S.C. Sec. 5321(b)(1).

 

Again, If the IRS assess FBAR penalties and the taxpayer refuses to pay them, the U.S. government can seek to collect the penalties in federal court pursuant to 31 U.S.C. Sec. 5321(b)(1).   The government must demonstrate in court by a preponderance of the evidence that (a) the taxpayer is a U.S. resident, citizen or business entity subject to the Bank Secrecy Act, (b) the taxpayer had a reporting obligation under the Bank Secrecy Act and failed to satisfy that reporting obligation, and (c) the nature of the taxpayer’s violation in terms of non-willful or willful violation of the statute, and (d) the taxpayer has failed to timely pay the assessed penalty.  The taxpayer must plead and prove any statute of limitations defects in the government’s case.  FBAR cases, as a general matter, are fact based cases.  Taxpayers win some and loose some.

This law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader.  You should consult with legal counsel in your geographical area with respect to any legal issues impacting you, your family or business.

Coleman Jackson, P.C. | Taxation, Litigation, Immigration Law Firm | English (214) 599-0431 | Spanish (214) 599-0432

¡Dar Es Bueno! Las Donaciones Están Sujetas A Impuestos Federales

Por Coleman Jackson, abogado y contador público certificado.
19 de junio de 2019

¡Dar Es Bueno! Las Donaciones Están Sujetas A Impuestos Federales

 

La Santa Biblia en 1 Timoteo 6:17 dice que Dios nos da abundantemente todas las cosas … Es una bendición poder dar. Dar es una expresión de gratitud y amor. Es bueno dar. Cada relación debe estar basada en el deseo de dar. Es más bendecido dar que recibir.

Dar en los Estados Unidos crea obligaciones fiscales para el donante. La Sección 2503 del Código de Ingresos Internos define “donaciones gravables” como la “cantidad total de donaciones hechas durante el año calendario, menos las deducciones proporcionadas en el subcapítulo C (sección 2522 y siguientes)”. Las reglas del impuesto federal sobre donaciones se aplican a las donaciones de interés presente para un donatario en lugar de transferencias de interés futuro por parte del donante al donatario. Según las leyes fiscales federales de los Estados Unidos, el donante (contribuyente) está sujeto a impuestos sobre el valor justo de mercado del regalo. El destinatario de la donación o donación no está sujeto a impuestos sobre la donación. ¡Pero! Las reglas especiales de declaración de impuestos imponen a los beneficiarios la obligación de revelar al IRS ciertos regalos grandes de ciudadanos extranjeros.

 

La valoración anual total de los obsequios otorgados por un donante es un conteo de todos los donativos otorgados por el donante para el año calendario. Dichos obsequios se informan anualmente en el Formulario 709, Declaración de impuestos de regalo de Estados Unidos (y transferencia de omisión de generación).  El Formulario 709, Declaración de impuestos de regalo de Estados Unidos (y transferencia de omisión de generación) vence el  15 de abril del año siguiente al año de la donación. Por ejemplo, si José Giver da los siguientes regalos en 2019:

  1. Acciones y bonos para el Receptor Jeremiah por un valor de mercado de $ 40,000;
  2. Transmite $ 250,000 a la cuenta bancaria extranjera del l  Receptora  Jennifer; y
  3. Da $ 4,000 a su sobrina, Carolyn, receptora menor de 21 años de edad en la fecha del regalo.

 

Jose Giver debe hacer un balance de los tres regalos a todos los destinatarios realizados en 2019 e reportar los regalos el  15 de abril de 2020 en el Formulario 709, Declaración de impuestos de regalos de los Estados Unidos (y transferencia de omisión de generación). La cantidad total de regalos para 2019 es de $ 294,000. La Sección 2503 del Código de Ingresos Internos proporciona una exclusión anual para los regalos de intereses presentes hechos a cualquier persona por un donante. En 2018, el monto de exclusión anual es de $ 15,000 y de conformidad con el Sec. IRC. 2523 la exclusión anual es de $ 155,000 en regalos a los cónyuges que no son ciudadanos de los EE. UU. Para los obsequios entregados en 2019, el monto de exclusión anual sigue siendo de $ 15,000, pero la exclusión anual para obsequios a cónyuges que no son ciudadanos de los EE. UU. Disminuye a $ 152,000 para obsequios hechos en 2019. Tenga en cuenta que el monto de exclusión anual está indexado a la tasa de inflación; por lo tanto, podría cambiar de un año a otro.

 

Otras leyes federales, incluidas otras normas de divulgación y divulgación de impuestos, podrían estar implicadas por los hechos descritos en la hipótesis hipotética anterior. Por ejemplo, el Receptor Jeremiah puede tener que reportar ganancias y pérdidas realizadas en las acciones y bonos. Los $ 250,000 transferidos a la cuenta de un banco extranjero de la receptora Jennifer posiblemente podrían crear requisitos de reporte bajo la Ley de Secreto Bancario que requiere que las personas de los Estados Unidos; que incluye a ciudadanos estadounidenses, extranjeros residentes, fideicomisos, patrimonios y entidades nacionales para presentar el Formulario 114, Informe de bancos extranjeros y cuentas financieras a la Red de Delitos Financieros el 15 de abril de 2020 si el saldo de la cuenta extranjera es de $ 10,000 o más en cualquier momento durante el año del calendario. Además, los $ 4,000 para su sobrina menor de edad implican las reglas de impuestos de Transferencia de Salto de Generación. Eso se aplica cuando los regalos saltan una generación. ¡Dar es bueno! Las donaciones están sujetas a impuestos federales.

Este blog de derecho está escrito por  La Firma de Abogados de Impuestos | Litigación  | Inmigración de Coleman Jackson, P.C. con fines educativos; Esto no crea relación de abogado-cliente entre esta firma de abogados y el lector. Usted debe consultar con un asesor legal en su área geográfica con respecto a todas las cuestiones legales que lo afectan a usted, su familia o negocio.

Coleman Jackson, P.C. | Firma de Abogados de Impuestos, Litigación e Inmigración |Ingles (214) 599-0431 | Español (214) 599-0432

Giving is good! Giving is Subject to Federal Taxation

By Coleman Jackson, Attorney and Certified Public Accountant
June 10, 2019

Giving is good!  Giving is Subject to Federal Taxation

The Holy Bible at 1 Timothy 6:17 says that God gives to us richly all things….  It is a blessing to be able to give.  Giving is an expression of gratitude and love.  It is good to give.  Every relationship should be based on the desire to give.  It is more blessed to give than to receive.

Giving in the United States creates tax obligations on the giver.  Internal Revenue Code Section 2503 defines “taxable gifts” as the “total amount of gifts made during the calendar year, less deductions provided in subchapter C (section 2522 and following).”  The federal gift tax rules applies to gifts of present interest to a donee as oppose to transfers of future interest by the donor to the donee.  Under United States federal tax laws, the donor (giver) is taxed on the fair market value of the gift.  The recipient of the gift or donee is not taxed on the gift.  But!   Special tax reporting rules imposes on the donee a duty to disclose to the IRS certain large gifts from foreign nationals.

 

Giving in the United States creates tax obligations on the giver

 

The total annual valuation of gifts given by a donor is a tally of all gifts given by the donor for the calendar year.  Such gifts are reported annually on Form 709, United States Gift (and Generation-Skipping Transfer) Tax ReturnForm 709, United States Gift (and Generation-Skipping Transfer) Tax Return is due on April 15th of the year following the year of the gift.  For example if Jose Giver gives the following gifts in 2019:

  • Stocks and bonds to Jeremiah Recipient worth $40,000 fair market value;
  • Wires $250,000 to the foreign bank account of Jennifer Recipient ; and
  • Gives $4,000 to his niece, Carolyn Recipient under 21 years of age at the date of the gift.

 

Form 709 United States Gift

Jose Giver must tally the three gifts to all recipients made in 2019 and report the gifts on April 15th 2020 on Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.  The total amount of gifts for 2019 is $294,000. Internal Revenue Code Section 2503 provides an annual exclusion for gifts of present interests made to any person by a donor.  In 2018 the annual exclusion amount is $15,000 and pursuant to IRC Sec. 2523 the annual exclusion is $155,000 on gifts to spouses who are not U.S. Citizens.  For gifts given in 2019 the annual exclusion amount remains $15,000, but the annual exclusion for gifts to spouses who are not U.S. Citizens decreases to $152,000 for gift made in 2019.  Note that the annual exclusion amount is indexed to the inflation rate; therefore, it could change from year to year.

 

Form 114, Report of Foreign Bank and Financial Accounts

Other federal laws, including other tax reporting and disclosure rules could be implicated by the facts described in the above hypothetical.  For example, Jeremiah Recipient may have to report gains & losses realized on the stocks and bonds.  The $250,000 wired to Jennifer Recipient’s foreign bank account could possibly create reporting requirements under the Bank Secrecy Act which requires that U.S. persons; which includes U.S. citizens, resident aliens, trusts, estates, and domestic entities to file Form 114, Report of Foreign Bank and Financial Accounts with the Financial Crimes Network on April 15th 2020 if the foreign account balance is $10,000 or more at any time during the calendar year.  Further the $4,000 to his under aged niece implicates the Generation- Skipping Transfer tax rules. That applies when gifts skip a generation.   Giving is good!  Giving is subject to federal taxation.

This law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader.  You should consult with legal counsel in your geographical area with respect to any legal issues impacting you, your family or business.

Coleman Jackson, P.C. | Taxation, Litigation, Immigration Law Firm | English (214) 599-0431 | Spanish (214) 599-0432.